Sensis boss stops searching for Telstra

The transition to a digital economy has claimed another victim, underlining concerns that one of Telstra’s oldest and most lucrative businesses is in terminal decline.

Confirming one of the worst kept secrets in the telco industry, long-serving directories boss and Foxtel chairman
Bruce Akhurst
yesterday announced he will depart
Telstra
in May after 15 years of service.

The departure was said to be amicable but comes as Sensis – Telstra’s Yellow Pages business – struggles to cope with competition from digital rivals, headlined by ubiquitous search engine Google.

Less than a year ago, Mr Akhurst launched a high-profile overhaul of Sensis, redirecting its focus away from print advertising to one based on sales across multiple channels, including online and mobile.

But barely six months later, Sensis issued a profit warning, prompting Telstra boss
David Thodey
to create a new media division and effectively demote Mr Akhurst, who until then reported directly to him.

Sensis, historically one of Telstra’s highest margin businesses, showed further signs of deterioration in the December half, with underlying earnings before interest, tax, depreciation and amortisation plunging 54 per cent to $130 million.

“I think it’s the most challenged part of the company. Sensis can be regarded as a business that is in terminal decline," said Constellation Capital Management head of company research Brian Han. “I just for the life of me can’t see how it has a future."

Recently installed digital media boss Rick Ellis will assume day-to-day responsibility for running Sensis until a permanent replacement is found. The former Television New Zealand boss recently took charge of the new digital division, which houses Sensis alongside Telstra’s 50 per cent stake in Foxtel and other media assets such as its internet TV offering – the T-Box – under one roof.

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Mr Thodey has been tight-lipped in recent interviews about Telstra’s future media plans as he waits for Mr Ellis to get comfortable in his role.

Telstra would not confirm whether Mr Ellis will assume Mr Akhurst’s position as chairman of Foxtel, when he steps down in May. \ Sources have also mentioned recently appointed chief financial officer and former AXA boss
Andy Penn
as a candidate for the chairman’s role.

Singapore Telecommunications, owner of Telstra’s biggest rival Optus, revamped its digital strategy last week, outlining plans to compete directly with the likes of Google and Apple in developing applications, hoping to capture a slice of the ­billions its customers spend online using mobile devices. The company also entered uncharted waters with the purchase of mobile advertising firm Amobee for $US320 million ($304 million).

But whether Telstra, which has had a string of disastrous forays into growth areas in the past, pursues a similar strategy remains to be seen. “I don’t know whether another restructuring of the media assets will do anything," Mr Han said. “For Sensis, it’s just a case of managing the decline and sucking as much cash out of it on the way."

Former Telstra chief executive Frank Blount hired Mr Akhurst as legal counsel in 1996. He went on to serve in senior roles across the company’s wholesale and BigPond businesses before taking the helm at ­Sensis in 2005.

His career flourished under Telstra chief executive from 1999 to 2004
Ziggy Switkowski
, who hailed Mr Akhurst’s contribution to the ­company during his tenure.

“On my watch Bruce was given increasingly senior roles, which he discharged excellently and I have the highest regard for him," he told The Australian Financial Review.

“I think he’s an exceptionally able chief executive, much admired and respected by his colleagues and a very effective builder of high ­performance teams."

Under Mr Akhurst, Sensis bucked offshore trends, where directories businesses crumbled. Up until 2009, the business still generated growth in print revenue, with listings in Yellow Pages comprising up at 80 per cent of total revenue.

“His legacy is that he kept Sensis operating at world-class performance levels longer than anyone of us expected was possible," Mr Switkowski said.

Sources believe Mr Akhurst could continue his career in the media, in executive positions or on boards.

“I have enjoyed my time as CEO of Sensis.

“It is time now for a change and I look forward to exploring new ­opportunities," Mr Akhurst said in a statement.

Mr Thodey has ushered in ­dramatic changes to Telstra’s senior management team since taking the reins in 2009. Two of his direct reports, former St George chief executive Paul Fegan, and long-serving chief financial officer and investor favourite
John Stanhope
, have departed the company recently.